IR Product

Amazon innovates by taking payment out of the equation at its new Amazon Go shop

Amazon [IRDX RAMZ] has unveiled its first Amazon Go store, which removes the need to pay in store.

Customers at the Seattle grocery store use a dedicated Amazon Go smartphone app to enter the shop. There, they take what they want from the shelves, and the technology adds items to their virtual basket, or takes them away if they put them back on the shelves. When they leave the store, their purchase automatically registers through the dedicated app, and they are sent a receipt.

“What would shopping look like if you could walk into a store, grab what you want and just go? what if we could weave the most advanced machine learning, computer vision, and AI into the very fabric of a store so that you never have to wait in line?” asks the Amazon video.

As yet the store, in Seattle, will initially be open only to Amazon employees as part of a beta trial, but it is expected to open to the general public next year.

Commenting on the news, Hugh Fletcher, digital business consultant, Salmon [IRDX VSMN], said: “The imminent launch of Amazon Go signifies a move away from traditional bricks and mortar stores and towards a new era of shopping. Even if a shopping experience is in-person, not online, shoppers are constantly telling us that they want the same speed, convenience and user-friendly experience that online and mobile shopping provides. As retailers move away from traditional stores, we expect technologies like Programmatic Commerce – the concept of automatic purchasing through connected devices – to dominate the sector.

“Our recent study found that 57% of UK shoppers will be ready for fully automated purchases through IoT devices within two years. Programmatic can therefore drive a new age of shopping that is IoT-enabled, and allow retailers to feed the modern day customer who is now accustomed to a more direct, quick and convenient method of shopping. Amazon has been smart here – the brand was born digitally but knows that the future of retail is a perfect mix of online and physical. Amazon Go is just a trial but we would expect it to catch on.”

Perry Krug, principal architect at database specialist Couchbase, said: “If Amazon Go succeeds, it will be the latest example of the digital economy, where customer experience is put above all else. Just as Uber revolutionised the taxi industry by focusing on what the passenger wanted: cheaper rates, ride tracking and rating, and the simplest experience possible, so Amazon is setting out its stall with IoT in retail. Retail is a dog eat dog world and Amazon has proved time and again that it has the appetite to take on all comers. Getting rid of the checkout, a mainstay of grocery retail worldwide, is a real statement of intent from Amazon: whether it can follow through remains to be seen.”

Krug added: “Whether IoT is to truly become the future of retail depends on a number of issues. First, a single store visited only by Amazon employees will be a very different proposition to a nationwide or worldwide roll-out; not to mention the difference in scale between a corner shop and a superstore. For IoT to truly take over, retailers will have to ensure that they can operate at scale, or its use will be limited to boutique cases. There is also the question of whether a store demands ubiquitous and unlimited internet access. If these services cannot function when offline, then certain areas will never see the benefit; while a sudden loss of connectivity could decimate the profitability of a store with no other payment options. Instead, retailers will need to take an offline-first approach; ensuring that their IoT stores work just as well when the Internet is taken out of the equation, even temporarily.”